The near-twofold surge in public sector banks and the recent selloff hasn't deterred veteran stock picker Vijay Kedia from staying bullish on the stocks.
PSU banks are more affordable than private banks and the trend is expected to persist, he said in an interview with NDTV Profit. Kedia said PSU banks will continue to outperform, with further potential for growth.
Selloff led by small and mid caps is an "adjustment" that will continue but won't turn in a crash despite froth in certain segments.
PSU Bank index is up over 85% in the past year despite the recent pullback across the market. Benchmark Nifty ended 1.5% lower and Sensex fell 1.2% on Wednesday. Midcap 150 tumbled over 4%, while Smallcap 250 plunged over 5%. The indices were trading higher on Thursday.
According to Kedia, the selloff was bound to happen as markets do not follow only one trend. This correction, he said, is an "indication of next bull market".
Kedia believes that the market will take some time to stabilise. And the benchmark indices will take some time to reach new highs even as investors can find value in certain areas.
"The sentiments will be sideways or weak for some time."
Other Top Bets
The tourism sector is emerging as a new theme in India, according to Kedia. The growing inclination of people to travel will likely bolster this sector, fueling growth, he said.
"Tourism could emerge as a significant theme for this decade," he said. "I have held Mahindra Holidays for the past five years, and I have also invested in airlines, particularly IndiGo," he said. "Railways could also be a good bet but I am not following."
Watch the full conversation here:
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